Wall Street fade is due to trade

The Dow Jones dropped 248.35 points to start the Tuesday session. It wasn’t alone. The S&P 500 and Nasdaq were also lower. Traders were antsy because the US/China trade talks look to be going off the rails. The promised tariff increase to 25% as of 12:01 am Friday has them spooked although more negotiations are scheduled for Wednesday. Prices have continued to slide in early trading.

Although there's precious little fresh data about,  last Friday’s nonfarm payrolls report is a distant memory and the next major data point, April CPI, isn’t available until Friday. Today’s JOLTS survey showed job openings increased 346,000 in March but it is third tier data and was ignored.

The US dollar opened in New York flat to slightly lower against the major G10 currencies. However, the whiff of risk aversion from Turkish and UK politics alongside the tariff threat led to broad-based demand. GBPUSD dropped 0.25%, falling as of 1400 GMT, from 1.3191 at the NY open to 1.3050, compared to its NY opening level over skepticism that talks between the Conservatives and Labour would bear any fruit. The intraday GBPUSD technicals are bearish while prices are below 1.3105. The break below 1.3060 (38.2% Fibonacci retracement of April 26, 1.2872 and May 3, 1.3176 range) targets further losses to the 61.8% Fibonacci level of 1.2988.

USDCAD rallied in concert with the broad US dollar demand and the drop in WTI oil prices. The Canada Ivey PMI index was 55.9, higher than the 53.0 forecast which may have served to slow topside moves.